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Assignment clause: meaning and sample wording
An assignment clause says whether a party can transfer its rights under the contract to someone else, for example when it sells its business, and on what conditions.
When to use it
Every contract. It matters most when either party might be acquired, reorganise into a new company, or want to subcontract the work.
Sample assignment clause
Neither party may assign, transfer, subcontract or deal in any other manner with any of its rights or obligations under this Agreement without the prior written consent of the other party, such consent not to be unreasonably withheld or delayed.
However, either party may assign this Agreement in its entirety, without consent, to an affiliate or to a successor to all or substantially all of its business or assets to which this Agreement relates, by giving written notice to the other party, provided that the assignee agrees in writing to be bound by this Agreement.
What to check
- Assignment versus novationAssignment transfers the benefit of a contract. Transferring obligations generally needs a novation, which requires the other party's agreement.
- Change of controlA share sale does not usually assign the contract, because the same company remains the party. If a change of ownership should trigger consent or termination, say so separately.
- Reasonable consent"Not to be unreasonably withheld" stops a counterparty using consent as leverage.
- SubcontractingDecide whether the supplier can subcontract, and whether it stays responsible for its subcontractors.
Make the variable parts fill themselves in
In a Word template, replace the details that change with {tags} and wrap optional wording in a section. Clausery turns them into questions, so each document only includes the parts that apply:
Neither party may assign this Agreement without the other party's prior written consent{#include_successor_exception}, except to a successor to all or substantially all of its business, on written notice{/include_successor_exception}.Paste this into your own template, then check it with the free template tag checker or read the template syntax.
Questions
Can a contract be assigned without consent?
Rights can often be assigned without consent unless the contract prohibits it or the contract is personal in nature. Most commercial contracts restrict assignment expressly.
What is the difference between assignment and novation?
Assignment transfers rights, such as the right to be paid. Novation replaces a party entirely, transferring both rights and obligations, and needs all parties to agree.
Can I use this sample wording as it is?
It is a general starting point. Contract law differs between countries and states, and the right wording depends on the deal, so have it reviewed before you rely on it.
Free templates that use it
Related clauses
- Notices clause
- Entire agreement clause
- Severability clause
- Amendment clause
- Waiver clause
- Counterparts and electronic signature clause
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This page is general information, not legal advice. Laws differ between countries and states; have wording reviewed for your situation before you rely on it.